Lowe’s Companies, Inc. LOW reported second-quarter net earnings of $2.4 billion, or diluted Earnings Per Share (EPS) of $4.27, compared to $4.17 in the year-ago quarter.
Adjusted diluted EPS rose 5.6% to $4.33 from $4.10, topping analyst estimates of $4.24.
Quarterly sales reached $23.96 billion, compared with $23.59 billion a year earlier, and came in slightly above Wall Street’s estimate of $23.96 billion. Comparable sales increased 1.1%.
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Gross margin expanded 34 basis points to 33.81%, with gross profit up 2.6% to $8.1 billion. Operating margin narrowed by 15 basis points to 14.5%.
“This quarter, the company delivered positive comp sales driven by solid performance in both Pro and DIY,” said Marvin R. Ellison, Lowe’s chairman, president and CEO. “In June, we closed on the acquisition of ADG, which strengthens our ability to capture a greater portion of Pro planned spend and expands our reach into the new home construction market.”
As of Aug. 1, 2025, Lowe’s operated 1,753 stores totaling 195.5 million square feet. During the quarter, the company invested $1.3 billion in the Artisan Design Group (ADG) acquisition and paid $645 million in dividends.
First-half operating cash flow was $7.6 billion, compared with $7.4 billion a year earlier. Cash and equivalents stood at $4.9 billion, with long-term debt of $30.54 billion and $4.2 billion in current maturities.
Outlook
Lowe’s updated its fiscal 2025 guidance to reflect the ADG acquisition. It now expects total sales of $84.5 billion to $85.5 billion, raised from $83.5 billion to $84.5 billion, and ahead of analyst estimates of $84.28 billion.
Comparable sales are projected to be flat to up 1% year over year. The company forecast operating margin of 12.1% to 12.2% and adjusted operating margin of 12.2% to 12.3%.
GAAP diluted EPS is expected at $12.10 to $12.35 versus analyst expectations of $12.29. Adjusted diluted EPS is projected at $12.20 to $12.45, raised from $12.15 to $12.40, compared with estimates of $12.29.
Capital expenditures are projected at approximately $2.5 billion.
Foundation Building Materials Acquisition
Lowe’s also announced it has entered into a definitive agreement to acquire Foundation Building Materials (FBM) for about $8.8 billion, strengthening its Pro customer offering.
The all-cash deal represents a 13.4× adjusted EBITDA multiple and is backed by $9.0 billion in fully committed bridge financing from Bank of America and Goldman Sachs. The transaction is expected to close in the fourth quarter of 2025, pending regulatory approvals.
FBM serves more than 40,000 Pro customers across over 370 locations in the United States and Canada. On a pro forma basis, it generated $6.5 billion in revenue and $635 million in adjusted EBITDA in 2024, with five-year compound annual growth rates (CAGR) of 25% for revenue and 30% for adjusted EBITDA.
Lowe’s said the acquisition enhances its Pro offering, increases Pro penetration, and positions the company for sustainable growth. “With this acquisition, we are advancing our multi-year transformation of the Pro offering,” Ellison said. FBM’s President and CEO, Ruben Mendoza, who will remain in place, added that combining with Lowe’s will provide a more comprehensive solution for Pro customers.
The deal is expected to be accretive to adjusted diluted EPS in its first full year, excluding synergies.
Price Action: LOW shares were trading higher by 3.08% to $264.25 premarket at last check Wednesday.
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